GMR lands in Delhi, GVK in Mumbai
By agencies   |   Wednesday, 01 February 2006, 20:30 IST
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NEW DELHI: The controversy-mired airport modernization program took off with the empowered Group of Ministers (eGoM) decided to allot Delhi airport to the Hyderabad-based GMR Group, tied up with Frankfurt airport and Malaysia airports. And the Mumbai airport has been awarded to the GVK Group, which has tied up with South Africa airports. Announcing about the developments, Minister for Civil Aviation, Praful Patel said, “The eGoM has accorded its approval for the GMR combine to develop Delhi airport, while GVK has bagged the project for developing Mumbai airport. The eGoM decision will now be communicated to the Cabinet.” Others who were in race for the contract was the Anil Ambani-led Reliance Group, which had tied up with Airport Mexico, the D S Group that had bid along with Munich airport, and Macquire (Australia), which had tied up Paris airport. The Essel-Turkish combine had been left out of consideration because it was last in both technical and financial bids. The Government short-listed the consortia led by the two companies after considering the revenue-sharing pattern of four bidders for each of the two airports. The GMR consortium was awarded the contract for developing the Delhi airport after they decided to match the revenue sharing that had been proposed by the Anil Ambani-led Reliance Group. Patel said, “The Reliance Group had proposed a revenue share of 45.99 percent while the GMR group had proposed 43.64 percent. However, they agreed to match the revenue share model proposed by Reliance, and, hence they have been awarded the right to develop Delhi airport.” The GMR group was given the choice of picking the airport of its liking as it was the only bidder that secured more than the cut-off of 80 percent as had been stipulated in the Request for Proposal (RFP), the Minister said. In the case of Mumbai airport, the GVK Group had proposed a revenue share of 38.70 percent; the GMR Goup had offered 33.03 percent, followed by the D S Group (28.12 percent) and the Reliance Group (21.33 percent). Questioned on any revenue loss for the Airports Authority of India (AAI) when the two metro airports — that generate more than half of its income — move away from it, the Minister said, “AAI will become a bigger company than what it is today. The financial position of AAI will be very close to what it is now. The country will get new airports and the Government will have to spend nothing to develop the two major metro airports. This will also help AAI concentrate on the development of other airports around the country.” Besides, the AAI will also receive dividend revenues from the 26 percent share it holds in the new joint venture companies, Patel added. On job cut, the Minster said, “While 60 per cent of the employees are to be absorbed, AAI will also require about 10-15 per cent to run its operations. In addition, about 5-8 per cent will also retire in the next few years. Therefore, the employees have nothing to fear.”

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